Max’s Group Reports Full Year 2016 Financial Results
Max’s Group Inc. (‘MGI’, the ‘Company’) systemwide sales grew 12% to P15.34 billion for 2016 from P13.72 billion for the previous year. Topline posted double-digit growth of 10% to P11.44 billion from P10.37 billion as of 31 December 2015. Restaurant sales increased 10% to P9.42 billion from P8.59 billion on the back of 77 new stores and steady same store sales performance. Online and delivery revenues came in 24% higher at P1.08 billion from P875.18 million for 2015 anchored on a centralized ordering and dispatch platform. Commissary sales stood relatively flat at P1.26 billion from P1.28 billion owing to closures of certain franchised outlets. Meanwhile, revenues from new franchises, royalty and continuing license fees rose 54% to P766.72 million compared to P497.51 million for 2015 mainly driven by a growing recurring income base and additional overseas franchise contracts. Cost of sales improved to 72.2% for 2016 as opposed to 72.6% for 2015. The Company mitigated pricing headwinds from rising input components with lower logistics and utility expenses. As a result, Earnings before interest, taxes, depreciation and amortization (EBITDA) registered at P1.47 billion translating to a net income of P561.74 million, up 12% versus P501.39 million year-on-year.
“We are fairly upbeat with our full year performance. We were able to successfully execute our strategies amidst a rapidly intensifying competitive environment. Overall, it was another productive year for us,” said Robert F. Trota, President and Chief Executive Officer of Max’s Group, Inc.
For 2016, Max’s Group rolled out 77 new stores including 16 overseas branches, bringing its total network count to 623 branches with 49 situated abroad. It has kept within reach of its objective of establishing 1,000 outlets including 200 international by 2020.
The Company has earmarked approximately P750 million to P800 million in capital expenditure largely for the rollout of another 60-70 new stores primarily among core brands Max’s Restaurant, Pancake House, Yellow Cab Pizza and Krispy Kreme for 2017.
On the offshore front, MGI continues to build on its expanding pipeline of over 140 stores slated to open in the coming years. Last year, the Company was able to secure eight development agreements for at least 80 stores across various geographies. Among the notable markets penetrated for 2016 include Yellow Cab Pizza in China and Singapore.
“We remain bullish on the pace of our global business. Our focus this year is to boost recurring income by accelerating store development. Nonetheless, we shall constantly be on the lookout for fresh territories,” stated Mr. Peter H. King, Chief Executive Officer of Max’s Group International.
MGI has likewise made significant progress in fortifying its support structure. Last year, the Company invested in major enterprise resource systems to automate processes and harmonize procedures throughout the organization. At the senior management level, MGI has on-boarded key professionals to strengthen its existing talent roster. There are also initial plans to expand commissary capacity to reinforce future growth.
“We are confident in sustaining the same momentum moving into 2017. We firmly believe prevailing economic conditions will remain supportive of our business,“ concluded Mr. Trota.